The price of foodgrain, onions and potatoes are set to increase after a four per cent value-added tax (VAT) is imposed from April 1.

The VAT on foodgrain and vegetables was first implemented by the state government in April 2006. After a series of protests from trade bodies, the government had passed an ordinance in June 2006 to restrict VAT imposition. This ordinance was renewed every year. However, this time with elections round the corner, the model code of conduct has come into play and the ordinance, which expires on March 31, has not been renewed.

Concerned over the non-renewal of the ordinance, various trade associations have now decided to approach the state government.

The Singhbhum Chamber of Commerce and Industry (SCCI) had already written a letter to Governor Syed Sibtey Razi, requesting him to renew the ordinance for one year, said Alok Choudhary, vice-president (trade) of SCCI.

Now traders would have no choice but to increase the prices of foodgrain if the ordinance is not renewed before March 31, pointed out the regional vice-president of the Federation of Jharkhand Chamber of Commerce and Industry (FJCCI), Suresh Sonthalia. He also said that other neighbouring states are not levying any VAT on foodgrain and vegetables.

We suggest that the governor give verbal orders to its officers, asking them not to levy VAT till the elections are over, as it would increase inflation in the state, added Sonthalia.

Traders also fear of being targeted by commercial tax officials if the ordinance is not renewed. FJCCI officials in the capital would soon hold a meeting with traders to decide on the future course of action.